Overseas Pakistanis help country post historic current account surplus of $1.9bn in 10MFY25

Pakistan has reported a current account surplus of $1.9 billion during the first ten months of the financial year 2024-25, marking a major turnaround from the $1.3 billion deficit recorded in the same period last year, according to the Pakistan Economic Survey 2024-25 unveiled on Monday.

The improvement comes despite ongoing geopolitical disruptions in global trade and a widening trade deficit.

The surplus was largely driven by a record-breaking $31.2 billion in remittances, reflecting a nearly 31% year-on-year increase in the said period.

A monthly high of $4.1 billion in March 2025 helped ease external financing pressures and supported the build-up of foreign exchange reserves, which climbed to $16.60 billion as of May 30, including $11.51 billion held by the State Bank of Pakistan (SBP).

Another strong contributor was the IT sector, which posted $3.1 billion in export earnings, including $400 million generated by freelancers—a testament to the growing digital services economy.

Pakistan’s current account posts $12mn surplus in April 2025

However, challenges persist. The goods trade deficit rose to $21.3 billion, as imports increased by 11.8%, outpacing the 6.8% growth in exports, which stood at $26.9 billion.

Key export drivers included textiles and rice, while imports surged mainly in petroleum, machinery, and food.

“The government achieved a historic primary surplus of 3% of GDP for July-March FY25, up from 1.5% in the same period last year (FY24),” Finance Minister Muhammad Aurangzeb said in the Economic Review.

The services account also widened, registering a $2.5 billion deficit, while the primary income account deficit climbed to $7.1 billion, primarily due to higher interest payments and dividend repatriation.

On the financial side, foreign direct investment slipped 2.7% to $1.8 billion, indicating subdued investor sentiment. Net outflows of $1.6 billion were recorded as debt repayments intensified and liabilities shrank.

Despite these concerns, the rupee remained stable, trading at Rs278.72 against the US dollar, buoyed by external account improvements.

With global trade expected to grow 2.7% in 2025, Pakistan aims to sustain its recovery through structural reforms under the URAAN Pakistan framework, focusing on export diversification, IT growth, trade diplomacy, and infrastructure improvements.

The current account surplus signals progress, but sustaining momentum will require targeted reforms to address underlying vulnerabilities in the external sector.